[2024] UKUT 10 (AAC)

In addition, the Tribunal reached its decision of the basis of Article 52 and in my judgment it was right to rely on that provision.

Article 52, so far as material, provides that

“(1)

Where the Secretary of State is satisfied that—

(a)

compensation has been or will be paid to or in respect of a person to or in respect of whom a pension or gratuity is being or may be paid; or …

the Secretary of State may take the compensation into account against the pension or gratuity in such manner and to such extent as he thinks fit and may withhold or reduce the pension or gratuity accordingly”

and “compensation” is defined in Article 52(3) to include:

“any periodical … payment in respect of the disablement … of any person, … or in respect of any incapacity sustained or suffered by any person, being a payment for which provision is made by or under any enactment”.

It Is not in dispute that the claimant is in receipt of UC with a LCWRA component. It is the LCWRA component which was the reason for abatement of the claimant’s UnSupp payments.

UC is provided for in terms of Part 1 of the 2012 Act. The definition of limited capability for work-related activity is set out in s. 37(2) of the 2012 Act:

“(2)

For the purposes of this Part a claimant has limited capability for work-related activity if—

(a)

the claimant's capability for work-related activity is limited by their physical or mental condition, and

(b)

the limitation is such that it is not reasonable to require the claimant to undertake work-related activity”.

It follows from this definition that a LCWRA payment is only made in circumstances where a physical or mental condition renders it unreasonable for the claimant to undertake work-related activity. Although expressed in different language, I am satisfied that such a payment is one made in respect of the claimant’s “disablement” in the terms of Article 52(3) of the SPO. Although the Secretary of State did not make this point, it seems to me that it could equally be said that such a payment is made in respect of the claimant’s “incapacity” within the terms of Article 52(3).

In that event, each of the three elements of the definition of “compensation” for the purposes of Article 52(3) has been made out. In the first place the claimant receives a periodical payment, namely the LCWRA component of UC. Secondly, that payment is “in respect of disablement” (or “incapacity”) as a result of a physical or mental condition which renders it unreasonable for him to undertake work-related activities by virtue of s. 37(2) of the 2012 Act. Thirdly, it is a payment for which provision is made under an enactment, namely the 2012 Act. Accordingly, the Secretary of State was afforded a discretionary power to withhold or abate the UnSupp payment “as he thinks fit”.

That result accords with the underlying policy of preventing double-compensation. If the claimant is compensated for his inability to engage in work-related activity from another source (in this case the LCWRA element of UC), it is not appropriate for the state also to make a further payment via a war pension payment in the form of UnSupp.

That is because a payment of an unemployability allowance in the form of UnSupp under Article 12(1) of the SPO 2006 is paid in respect of disablement so serious as to render the claimant unemployable:

“Subject to the provisions of this article, where a member of the armed forces is in receipt of retired pay or a pension in respect of disablement so serious as to make him unemployable, he shall be awarded unemployability allowances, being—

(a)

a personal unemployability allowance at the appropriate rate specified in paragraph 5(a) of Part IV of Schedule 1 …”.

There is a clear overlap between a payment in respect of disablement so serious as to render the claimant unemployable and a payment made because the capability for work-related activity is limited by a claimant’s physical or mental condition and the limitation is such that it is not reasonable to require the claimant to undertake work-related activity.

The claimant sought to rely on his conversation with the Department of Work and Pensions on or about 3 February 202 to the effect that “you will see that he has called UC explaining his WP and they have said there is no cross over with UC except ESA and he is not on ESA”. What may or may not have been said in a telephone conversation cannot override the correct interpretation of the statutory scheme.

What the Department in fact said in his UC journal entry for that date was that war disablement pension did not affect his UC, but that under war pension rules the LCWRA element of UC did overlap with war pension UnSupp:

“I am answering your email because I think I need to try to explain about Universal Credit and War Pension Unemployability Supplement.

Under Universal Credit rules, War Pension Unemployability Supplement does not overlap.

However, under War Pension rules, the health allowance component of Universal Credit (LCWRA) overlaps with War Pension Unemployability Supplement.

This is why we have had to reduce your UnSupp by the amount you received for UC LCWRA”.

The Secretary of State repeated his position in a statement dated 7 February 2023:

“… War Pension Payments are not taken into account when calculating eligibility to Universal Credit.

However, under the War Pension Scheme, the Secretary of State considers that the health allowance component of Universal Credit overlaps with Unemployability Supplement because it is paid for thew same contingency i.e. financial support for people unable to work on the grounds of incapacity.

As there is no provision within the overlapping benefit regulations which can prevent an award of allowances under both schemes, Article 52 of the SPO is used to abate the award of Unemployability Supplement”.

It seems to me that what was said in those paragraphs was an accurate statement of the position, as was the ministerial statement of 14 September 2020 by Baroness Stedman-Scott on which the claimant also sought to rely, that payments under the war pension scheme were not taken into consideration as income for the purposes of UC. In short, war pension payments are not taken into account when calculating eligibility to UC. However, under the SPO 2006, where the Secretary of State considers that the health allowance component (whether LCW or LCWRA) of UC overlaps with UnSupp because it is paid for the same contingency (i.e. financial support for people unable to work on the grounds of disablement or incapacity incapacity), he is entitled to use Article 52 to abate the award of UnSupp.

The claimant sought to rely on the details of a “Benefits Factsheet” produced by the Armed Services Advice Project (“ASAP”) in conjunction with CPAG in August 2022 which set out in tabular form any particular allowance and the corresponding benefit overlap. In that table the UnSupp allowance is shown only as correspondingly overlapping with contributory ESA and category A or B retirement pension or state pension.

He also sought to rely on a statement of the gov.uk website that UnSupp could not be paid when ESA was in payment. He therefore argued that, since he was not in receipt of ESA, his UnSupp could not be abated by virtue of his receipt of UC.

However, in the first place statements in a benefits factsheet or on a website cannot override the applicable statutory provisions and do not assist the claimant. In the second place, the statement on the gov.uk website is not incompatible with the present situation. What it says is that UnSupp cannot be paid when ESA is in payment. It does not say that UnSupp cannot be abated when UC is in payment.

Thus I am satisfied the Tribunal was right to conclude that the Secretary of State was entitled to abate the award of UnSupp by virtue of Article 52 and therefore any reliance on Article 12(10)(b) was not material to the Tribunal’s decision.

If the reliance on Article 12(10)(b) amounted to an error of law which was material to the decision, I would have remade the decision to the effect that the Secretary of State was entitled to abate the UnSupp payment in respect of the award of UC by virtue of Article 52 of the SPO alone and thereby have reached the same result.